Summer’s about to start in America. So is sticker shock.
With coronavirus cases plummeting and 1.8 million U.S. residents getting vaccinated each day, more Americans plan this upcoming Memorial Day weekend to get back to old pleasures like friends over, evenings out, travel and afternoons at a ball game.
They will also encounter something new and less pleasant: rising prices.
Overall, U.S. consumer prices in April were up about 3.1% compared with February 2020, the month before the pandemic shut down the economy. Data published Friday showed a separate measure of inflation surging 3.6% last month, and underlying inflation excluding volatile gas and food prices gaining 3.1%, its largest annual increase since 1992.
And that may be only the beginning. A survey from the University of Michigan on Friday showed consumers’ one-year inflation expectations shot up to 4.6% in May from 3.4% in April.
Prices are expected to keep rising for much of the summer, pushed up by, among other things, bottlenecks crimping supply of both materials and labor, and surging consumer demand.
Reuters put together a “Memorial Day Weekend price index” to capture the rising cost of an imaginary basket of things and indulgences redolent of the summer’s first long weekend, which this year is May 29-31.
The index, comprised largely of leisure expenses and excluding the cost of housing and doctor’s visits among other mundane items, rose about 4.3%, faster than the overall consumer price index.
As Americans venture out to do and buy things many haven’t for a long while, they’ll find price changes are anything but uniform. Here’s a sampling:
Going shopping: Memorial Day sales are an enduring feature of summertime’s opening three-day weekend, with deals on big-ticket items like washing machines and mattresses. But with demand up, parts scarce, and inventories low, prices for durables are up 7.5% from February 2020.
Weekend getaway: Despite a sharp rise recently, including a 10% increase from March to April, airfares are still 18% below pre-pandemic levels, meaning that an air ticket today is going for around what it might have done about 15 years ago. Lodging has similarly risen dramatically in recent months, but the price index tracking hotels, motels and Airbnbs, among others, is still about 5% below pre-pandemic. Car rental is another matter: the index tracking automobiles and truck rental prices is up 45%.
Dinner, beer: Overall, the rise in prices is in line with the average across all goods and services since the pandemic’s onset, with the price of full-service meals and snacks up about 3% since February 2020, the same as that for alcoholic beverages away from home.
Backyard cookout: Throwing food on the grill for friends or family? Ground beef prices are up 7%; hotdogs are up 11%. Vegetables have risen only 2% since February 2020, and the price of a fresh or frozen pie for dessert has fallen 1%.
Movies, theme parks, ball games: Overall the cost of admission to a movie, theater, amusement park or concert is up only 2% from pre-pandemic levels. With some theaters permanently shut and other large venues reopening or beginning to let bigger crowds in, it’s unclear how the balance of supply and demand may change that. Meanwhile, as of April the price index for admission to sporting events was down 1% from the pre-pandemic level.
A trim and a tattoo: The price index for haircuts and other personal services like manicures and pedicures is up about 6% since before the pandemic. Bookings at tattoo parlors are reportedly up, but the Bureau of Labor Statistics doesn’t track the price of body art.